| Many of the largest institutional pension funds | | | | going to South Africa is that any move they |
| making their way through South Africa on a | | | | make needs to be well diversified to manage risk. |
| roadshow to review possible private equity deals. | | | | If they invest in a few international private equity |
| In a news piece this morning Martin Arnold of the | | | | firms, those firms should probably be based in |
| FT said that, "Investments in African private | | | | more places than just China and India. Many |
| equity have more than doubled in a couple of | | | | pension funds hire institutional consultants who are |
| years, as big US, European, Middle East and Asian | | | | paid highly for their ability to create a risk budget |
| institutional investors have raised their allocation to | | | | rand run portfolio optimization analytics which |
| emerging markets and sought to diversify their | | | | include the correlation of returns in different |
| portfolio." South African Private Equity firms raised | | | | national markets and make recommendations |
| $1B in 2005, $2.35B in 2006, and now with a | | | | based on that analysis. |
| couple months left to go they are up over $2B in | | | | What's next? |
| additional investments for 2007. | | | | Usually what starts in the institutional investment |
| China, India, and South Africa? | | | | world eventually is pushed down through the bank |
| The explosive growth of China and India over the | | | | channels, investment platforms, broker-dealers, |
| past 5-7 years has really sparked the interest of | | | | and retail clients. I would guess that in 3-5 years |
| investors large and small due to their seemingly | | | | there are a few South African mutual fund and |
| weak correlation with the US stock market and | | | | etf products that do well while the hedge fund |
| large returns. The reason why pension funds are | | | | and private funds in the area continue to grow. |